Sandisk Corp

Previous wording

Sandisk is a leading developer, manufacturer and provider of data storage devices and solutions based on NAND flash technology. With a differentiated innovation engine driving advancements in storage and semiconductor technologies, our broad and ever-expanding portfolio delivers powerful flash storage solutions for artificial intelligence (“AI”) workloads in datacenters, edge devices, and consumer applications. Our technologies enable everyone from students, gamers, and home offices to the largest enterprises and public clouds toproduce, analyze, and store data. Our solutions include a broad range of solid-state drives (“SSD”), embedded products, removable cards, universal serial bus drives and wafers and components. Our broad portfolio of technology and products addresses multiple end markets of “Datacenter” (formerly referred to as “Cloud”), “Edge” (formerly referred to as “Client”), and “Consumer.”

Current wording

Sandisk is a leading global semiconductor memory company with more than 30 years of innovation in NAND flash technology. We are a vertically integrated solutions provider with ownership of chip-level design and IP, front and back-end manufacturing, as well as systems engineering and design. With a differentiated innovation engine driving advancements in storage and semiconductor technologies, our broad and ever-expanding portfolio delivers powerful flash storage solutions for artificial intelligence (“AI”) workloads in datacenters, edge devices, and consumer applications. Our technologies enable everyone from students, gamers, and home offices to the largest enterprises and public clouds toproduce, analyze, and store data. Our solutions include a broad range of solid-state drives, embedded products, removable cards, universal serial bus drives and wafers and components. Our broad portfolio of technology and products addresses multiple end markets of“Datacenter”, “Edge”, and “Consumer.”

Previous wording

The Datacenter end market is comprised primarily of products for datacenters, cloud service providers, and private cloud customers. Through the Edge end market, we provide our original equipment manufacturer (“OEM”) and channel customers a broad array of high-performance flash solutions across personal computer, mobile, gaming, automotive, virtual reality headsets, at-home entertainment, and industrial spaces. The Consumer end market is highlighted by our broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast points of presence around the world.

Current wording

Datacenter represents a large and growing end market comprised primarily of products for public or private cloud environments and enterprise customers. Through the Edge end market, we provide our original equipment manufacturers (“OEMs”) and channel customers a broad array of high-performance flash solutions across personal computer, mobile, gaming, automotive, physical AI, at-home entertainment, and industrial spaces. The Consumer end market is highlighted by our broad range of retail and other end-user products, which capitalize on the strength of our product brand recognition and vast presence around the world.

Previous wording

Our fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, we report a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal year 2025, which ended on June 27, 2025, was comprised of 52 weeks, with each fiscal quarter consisting of 13 weeks. Fiscal year 2026 is comprised of 53 weeks and ends on July 3, 2026, with the first fiscal quarter consisting of 14 weeks.

Current wording

The Company’s fiscal year ends on the Friday nearest to June 30 and typically consists of 52 weeks. Approximately every five to six years, we report a 53-week fiscal year to align the fiscal year with the foregoing policy. Fiscal year 2026, which ended on July 3, 2026 was comprised of 53 weeks, with the first fiscal quarter consisting of 14 weeks. Fiscal year 2027 will be comprised of 52 weeks and will end on July 2, 2027, with each fiscal quarter consisting of 13 weeks. Unless otherwise indicated or the context requires, references herein to specific years and quarters are to fiscal years and fiscal quarters, and references to financial information are on a condensed consolidated basis.

Previous wording

On February 21, 2025, WDC executed the spin-off of the Company through WDC’s pro rata distribution of 116,035,464, or 80.1%, of the Company’s outstanding shares of common stock to holders of WDC’s common stock. Each WDC stockholder received one-third (1/3) of one share of the Company’s common stock for each share of WDC’s common stock held by such WDC stockholder as of February 12, 2025, the record date of the distribution. Upon completion of the separation, WDC owned 28,827,787, or 19.9%, of the outstanding shares of the Company’s common stock. Following the distribution, the Company became an independent publicly listed company, and on February 24, 2025, the Company began trading as an independent, publicly traded company under the stock symbol “SNDK” on Nasdaq.

Current wording

On February 21, 2025, WDC executed the spin-off of the Company through WDC’s pro rata distribution of 116,035,464, or 80.1%, of the Company’s outstanding shares of common stock to holders of WDC’s common stock. Following the distribution, the Company became an independent publicly listed company, and on February 24, 2025, the Company began trading under the stock symbol “SNDK” on Nasdaq. Each WDC stockholder received one-third (1/3) of one share of the Company’s common stock for each share of WDC’s common stock held by such WDC stockholder as of February 12, 2025, the record date of the distribution, and WDC retained ownership of 19.9%, of the outstanding shares of the Company’s common stock. As of July 3, 2026, WDC has sold or exchanged all of such shares of the Company’s common stock.

Previous wording

On March 4, 2026, the Company settled in full the remaining outstanding principal amounts of the Term Loan Facility, plus accrued interest, using cash on hand. In connection with the early settlement of the Term Loan Facility, the Company recognized a loss on debt extinguishment of $46 million resulting from the write-off of the remaining unamortized issuance costs.

Current wording

On March 4, 2026, the Company settled in full the remaining outstanding principal amounts of the Term Loan Facility, plus accrued interest, using cash on hand. In connection with the early settlement of the Term Loan Facility, the Company recognized a loss on debt extinguishment resulting from the write-off of the remaining unamortized issuance costs.

Previous wording

In the third quarter, we continued to observe that the rapid growth of AI infrastructure is driving demand for high-performance storage products, and AI adoption is driving the need for NAND storage to support these workloads, leading to increased revenues when compared to prior periods. The current demand environment has led to pricing shifts that have positively impacted our business, and we expect these favorable pricing trends to have a positive impact on our revenue and cash flows from operations. We expect these conditions to persist through calendar year 2026 and beyond. Accordingly, we expect to invest in, and allocate resources to, high-value opportunities for both the short-term and long-term benefit of our customers and the Company.

Current wording

In the first quarter, we continued to observe that the rapid growth of AI infrastructure is driving demand for high-performance storage products, and AI adoption is driving the need for NAND storage to support these workloads, leading to increased revenues when compared to prior periods. The current environment and market demand have led to pricing and product mix shifts, including strategic decisions about how we allocate products to customers across the end markets we serve. These shifts have positively impacted our business, and we expect these favorable pricing trends and product mix shifts to have a positive impact on our revenue and cash flows from operations. We expect AI-driven demand to persist through calendar year 2027 and beyond. Accordingly, we expect to invest in, and allocate resources to, high-value opportunities for both the short-term and long-term benefit of our customers and us.

Previous wording

The Trump Administration has made a number of changes in U.S. trade policy, including the imposition of tariffs under the authority of the International Emergency Economic Powers Act, which the U.S. Supreme Court found unlawful in February 2026, the creation of a refund process for such tariff duties, and the imposition of new tariffs under other statutory authorities. Currently, the majority of our products sold in the U.S. are exempt from tariffs, but additional tariff increases, or the loss of applicable exemptions, would increase the cost of goods sold for our products sold in the U.S., which could negatively impact our margins and financial performance. Increases in the price of our products in response to increased costs may adversely impact demand for those products in the U.S., which could also negatively impact our performance and financial results. Future trade policies and regulations in the U.S. and other countries, the terms of any trade arrangements that may be negotiated between the U.S. and other countries, the scope, amount, or duration of tariffs that may be imposed by any country, and the impact of these factors on our business are uncertain and may contribute to increased costs and reduced demand for our products, each of which could harm our financial performance.

Current wording

There are pending and ongoing investigations initiated by the United States under Section 232 of the Trade Expansion Act of 1962 and Section 301 of the Trade Act of 1974 that may impact tariff rates for our products. Currently, the majority of our products sold in the U.S. are exempt from tariffs, but additional tariff increases, or the loss of applicable exemptions, would increase the cost of goods sold for our products sold in the U.S., which could negatively impact our margins and financial performance. Increases in the price of our products in response to increased costs may adversely impact demand for those products in the U.S., which could also negatively impact our performance and financial results. Future trade policies and regulations in the U.S. and other countries, the terms of any trade arrangements that may be negotiated between the U.S. and other countries, the scope, amount, or duration of tariffs that may be imposed by any country, and the impact of these factors on our business are uncertain and may contribute to increased costs and reduced demand for our products, each of which could harm our financial performance.

Previous wording

On February 21, 2025, the Company became a standalone publicly traded company, and its financial statements are now presented on a consolidated basis. Prior to the separation, the Company’s historical consolidated financial information was derived from WDC’s consolidated financial statements and accounting records and prepared as if the Company existed on a standalone basis. The financial statements for all periods presented, including the historical results of the Company prior to February 21, 2025, are now referred to as “Consolidated Financial Statements” and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the policies and practices that are generally accepted in the industry in which it operates, consistent with prior statements.

Current wording

On February 21, 2025, the Company became a standalone publicly traded company, and its financial statements are now presented on a condensed consolidated basis. Prior to the separation, the Company’s historical condensed consolidated financial information was derived from WDC’s condensed consolidated financial statements and accounting records and prepared as if the Company existed on a standalone basis. The financial statements for all periods presented, including the historical results of the Company prior to February 21, 2025, are now referred to as “Condensed Consolidated Financial Statements” and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the policies and practices that are generally accepted in the industry in which it operates.

Previous wording

The changes in net revenue by geography in the three and nine months ended April 3, 2026 from the comparable period in the prior year primarily reflected higher revenue in the Asia and Americas regions from Edge and Datacenter customers.

Current wording

The changes in net revenue by geography in the three months ended October 2, 2026 from the comparable period in the prior year primarily reflected higher revenue in the Asia and Americas regions from Edge and Datacenter customers, which were offset by lower revenue across all regions from Consumer customers.

Previous wording

Consistent with standard industry practice, we offer sales incentive and marketing programs that provide customers with price protection and other incentives or reimbursements that are recorded as a reduction to gross revenue. For the three months ended April 3, 2026 and March 28, 2025, these programs represented 12% and 19%, respectively, of gross revenues. For the nine months ended April 3, 2026 and March 28, 2025, these programs represented 13% and 19%, respectively, of gross revenues. The amounts attributed to our sales incentive and marketing programs generally vary according to several factors, including industry conditions, list pricing strategies, seasonal demand, competitor actions, channel mix and overall availability of products. Changes in future customer demand and market conditions may require us to adjust our incentive programs as a percentage of gross revenue.

Current wording

Consistent with standard industry practice, we offer sales incentive and marketing programs that provide customers with price protection and other incentives or reimbursements that are recorded as a reduction to gross revenue. For the three months ended October 2, 2026 and October 3, 2025, these programs represented 9% and 16%, respectively, of gross revenues. The amounts attributed to our sales incentive and marketing programs generally vary according to several factors, including industry conditions, list pricing strategies, seasonal demand, competitor actions, channel mix and overall availability of products. Changes in future customer demand and market conditions may require us to adjust our incentive programs as a percentage of gross revenue.

Previous wording

Gross profit increased by $4,280 million and $5,176 million, respectively, for the three and nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to a higher ASP and an increase in exabytes sold.

Current wording

Gross profit increased by $8.7 billion for the three months ended October 2, 2026 from the comparable period in the prior year, primarily due to a higher revenue per gigabyte and an increase in exabytes sold.

Previous wording

Gross margin increased by 5,600 basis points and 3,000 basis points, respectively, for the three and nine months ended April 3, 2026 from the comparable period in the prior year, primarily due to a higher ASP and an increase in exabytes sold.

Current wording

Gross margin increased by approximately 5,500 basis points for the three months ended October 2, 2026 from the comparable period in the prior year, primarily due to a higher revenue per gigabyte and an increase in exabytes sold.

Previous wording

Research and development (“R&D”) expenses increased $52 million in the three months ended April 3, 2026 from the comparable period in the prior year, primarily due to a $42 million increase in compensation and benefits due to variable compensation associated with company performance and increased headcount and a $5 million increase in stock-based compensation.

Current wording

Research and development (“R&D”) expenses increased $68 million in the three months ended October 2, 2026 from the comparable period in the prior year, primarily due to a $37 million increase in compensation and benefits due to variable compensation associated with company performance and increase in taxes relating to long-term incentives, a $15 million increase in software and operating system services related to internal-use software, and a $11 million increase in stock-based compensation.

Previous wording

Selling, general and administrative expenses increased $22 million in the three months ended April 3, 2026 from the comparable period in the prior year, primarily due to a $15 million increase in compensation and benefits, mainly due to variable compensation associated with company performance and increased headcount, and a $6 million increase in customer marketing engagements, offset by a $5 million decrease in materials due to a change in business practice for the launch of new products whereby the Company is distributing fewer free samples and has started entering into contracts to sell certain qualification units to customers. The costs of qualification units are recorded in inventory until sold to customers and recognized as cost of revenue. The change contributed to a decrease in materials and production costs classified as selling expenses when compared to the prior year period, partially offset by a $4 million increase in stock-based compensation.

Current wording

Selling, general and administrative expenses increased $35 million in the three months ended October 2, 2026 from the comparable period in the prior year, primarily due to a $25 million increase in stock-based compensation, an $18 million increase in compensation and benefits, mainly due to an increase in taxes relating to long-term incentives and variable compensation associated with company performance, and a $9 million increase in customer marketing engagements, offset by a $20 million decrease in materials due to a change in business practice for the launch of new products whereby the Company is distributing fewer free samples and has started entering into contracts to sell certain qualification units to customers. The costs of qualification units are recorded in inventory until sold to customers and recognized as cost of revenue. The change contributed to a decrease in materials and production costs classified as selling expenses when compared to the prior year period.

Previous wording

Employee termination and other charges decreased $7 million in the nine months ended April 3, 2026 from the comparable period in the prior year as there were no restructuring actions taken in the current period.

Current wording

Employee termination and other charges decreased $3 million in the three months ended October 2, 2026 from the comparable period in the prior year as there were no restructuring actions taken in the current period.

Previous wording

Business separation costs decreased $2 million in the three months ended April 3, 2026 from the comparable period in the prior year due to post-separation-related costs decreasing.

Current wording

Business separation costs decreased $9 million in the three months ended October 2, 2026 from the comparable period in the prior year due as there were no post-separation-related activities in the current period.

Previous wording

(Gain) loss on business divestiture decreased $44 million in the nine months ended April 3, 2026 from the comparable period in the prior year as a result of the closing of the sale of SDSS on September 28, 2024 and an amendment to the Amended and Restated Equity Purchase Agreement with JCET, related to our prior sale of SDSS, in the current period that resulted in a loss. On September 25, 2025, SanDisk China and JCET entered into an Amendment No. 1 to the Amended and Restated Equity Purchase Agreement that included a $10 million provision for working capital support, resulting in a reduction of the September 28, 2025 installment payment from JCET. The Company recognized the adjustment as a loss on business divestiture for the nine months ended April 3, 2026, as discussed in Part I, Item 1, Note 10, Related Parties and Related Commitments and Contingencies—Flash Venturesof the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

Loss on business divestiture decreased $10 million in the three months ended October 2, 2026 from the comparable period in the prior year because the prior-year period included a $10 million loss resulting from Amendment No. 1 to the Amended and Restated Equity Purchase Agreement with JCET Management Co., Ltd., related to our prior sale of SDSS.

Previous wording

H.R. 1, more widely known as the One Big Beautiful Bill Act (“OBBBA”), was signed into law on July 4, 2025. It reversed the requirement for capitalization of U.S. research and development expenditures that came into law under the Tax Cuts and Jobs Act of 2017, but the mandatory requirement of capitalization of foreign research and development expenditures remains. The tax rates for income earned by our foreign subsidiaries will also be changed under H.R. 1, which applies to our fiscal years 2027 and onward. Depending on our operating results, these changes can materially impact our effective tax rate and operating cash flows. During the nine months ended April 3, 2026, we recorded a $10 million tax benefit in relation to the OBBBA’s impact on the Company’s 2025 tax provision.

Current wording

H.R. 1, more widely known as the One Big Beautiful Bill Act (“OBBBA”), was signed into law on July 4, 2025. It reversed the requirement for capitalization of U.S. research and development expenditures that came into law under the Tax Cuts and Jobs Act of 2017, but the mandatory requirement of capitalization of foreign research and development expenditures remains. The tax rates for income earned by our foreign subsidiaries are also changed under H.R. 1, which applies to our fiscal years 2027 and onward. Depending on our operating results, these changes can materially impact our effective tax rate and operating cash flows.

Previous wording

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law, which contained significant changes to laws related to tax, climate, energy, and health care. The tax measures include, among other things, a corporate alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted financial statement income (“AFSI”) exceeding $1.0 billion. We do not expect to be subject to the CAMT of 15% for fiscal year 2026 as our average annual AFSI did not exceed $1.0 billion for the preceding three-year period.

Current wording

On August 16, 2022, the Inflation Reduction Act of 2022 was signed into law, which contained significant changes to laws related to tax, climate, energy, and health care. The tax measures include, among other things, a corporate alternative minimum tax (“CAMT”) of 15% on corporations with three-year average annual adjusted financial statement income (“AFSI”) exceeding $1.0 billion. The Company assesses the impact of CAMT and recognizes it as a component of its income tax provision.

Previous wording

On December 20, 2021, the Organisation for Economic Co-operation and Development G20 Inclusive Framework on Base Erosion and Profit Shifting released Model Global Anti-Base Erosion rules under Pillar Two (“Pillar Two”). Pillar Two is currently effective in most of the jurisdictions in which we operate. Accordingly, these taxes are included in the Company’s Income tax expense for the three and nine months ended April 3, 2026.

Current wording

On December 20, 2021, the Organisation for Economic Co-operation and Development G20 Inclusive Framework on Base Erosion and Profit Shifting released Model Global Anti-Base Erosion rules under Pillar Two (“Pillar Two”). Pillar Two is currently effective in most of the jurisdictions in which we operate. Accordingly, these taxes are included in the Company’s Income tax expense for the three months ended October 2, 2026.

Previous wording

The relative mix of earnings and losses by jurisdiction, credits and tax holidays in Malaysia that will expire at various dates during years 2028 through 2031 resulted in decreases to the effective tax rate below the U.S. statutory rate for the three and nine months ended April 3, 2026.

Current wording

The relative mix of earnings and losses by jurisdiction, foreign-driven deduction eligible income, credits and tax holidays in Malaysia that will expire at various dates during years 2028 through 2031 resulted in decreases to the effective tax rate below the U.S. statutory rate for the three months ended October 2, 2026.

Previous wording

In alignment with market conditions, we maintained what we believe to be a conservative capital expenditure strategy for fiscal year 2025. For fiscal year 2026, we increased our capital investments as we transition to newer nodes to meet the demand and technology needs of our product portfolio.

Current wording

For fiscal year 2026, we increased our capital investments as we transitioned to newer nodes to meet the demand and technology needs of our product portfolio. For fiscal year 2027, we anticipate increased capital investments as we transition to newer nodes to meet the demand and technology needs of our product portfolio.

Previous wording

We believe our cash and cash equivalents will be sufficient to meet our working capital and, capital expenditure needs, as well as to fund any repurchases of our shares under the Repurchase Program, for at least the next twelve months and for the foreseeable future thereafter. We believe we can also access the various capital markets to further supplement our liquidity position if necessary. Our ability to sustain our working capital position is subject to a number of risks that we discuss under the heading “Risk Factors” included in Part I, Item 1A. Risk Factors included in our Annual Report on Form 10-K.

Current wording

We believe our cash and cash equivalents will be sufficient to meet our working capital and capital expenditure needs, as well as to fund any repurchases of our shares under the Repurchase Programs (as defined under Share Repurchase Authorization below). We believe we can also access the various capital markets to further supplement our liquidity position if necessary. Our ability to sustain our working capital position is subject to a number of risks that we discuss in Part I, Item 1A., Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended July 3, 2026.

Previous wording

A total of$2,001 million and $692 million of our cash and cash equivalents were held outside of the U.S. as of April 3, 2026 and June 27, 2025, respectively. There are no material tax consequences that were not previously accrued for the repatriation of this cash. Our cash equivalents are primarily invested in money market funds that invest in U.S. Treasury securities and U.S. Government agency securities.

Current wording

A total of$2.1 billion and $626 million of our cash and cash equivalents were held outside of the U.S. as of October 2, 2026 and October 3, 2025, respectively. There are no material tax consequences that were not previously accrued for the repatriation of this cash. Our cash equivalents are primarily invested in money market funds that invest in U.S. Treasury securities and U.S. Government agency securities.

Previous wording

Net cash provided by operating activities primarily consists of net income or loss, adjusted for non-cash charges, plus or minus changes in operating assets and liabilities. Net cash used as a result of changes in operating assets and liabilities was $396 million in the nine months ended April 3, 2026, as compared to $436 million net cash used in the nine months ended March 28, 2025, reflecting an increase in the volume of our business, as discussed above.

Current wording

Net cash provided by operating activities primarily consists of net income, adjusted for non-cash charges, plus or minus changes in operating assets and liabilities. Net cash used as a result of changes in operating assets and liabilities was $1.3 billion in the three months ended October 2, 2026, as compared to $250 million net cash provided in the three months ended October 3, 2025, reflecting an increase in the volume of our business, as discussed above.

Previous wording

For the three months ended April 3, 2026, DSO decreased 11 days primarily due to higher revenue during the period and continued strong receivables collections. During the three months ended April 3, 2026, DIO increased 8 days over the three months ended March 28, 2025, primarily due to inventory builds to meet demand. DPO increased 7 days over the comparable period in the prior year, primarily due to routine variations in the timing of purchases and payments during the period.

Current wording

For the three months ended October 2, 2026, DSO increased 3 days primarily due to higher revenue during the period and continued strong receivables collections. During the three months ended October 2, 2026, DIO increased 51 days over the three months ended October 3, 2025, primarily due to inventory builds to meet demand. DPO increased 18 days over the comparable period in the prior year, primarily due to routine variations in the timing of purchases and payments during the period.

Previous wording

Net cash used in investing activities in the nine months ended April 3, 2026 primarily consisted of $165 million in net issuances from activity related to Flash Ventures and $134 million in capital expenditures, partially offset by $25 million in net proceeds from our sale of a majority interest in one of our subsidiaries. Net cash provided by investing activities in the nine months ended March 28, 2025 primarily consisted of $401 million in net proceeds from our sale of a majority interest in one of our subsidiaries and $330 million in net proceeds from activity related to Flash Ventures, partially offset by $159 million in capital expenditures.

Current wording

Net cash used in investing activities in the three months ended October 2, 2026 primarily consisted of $148 million in net issuances from activity related to Flash Ventures, $70 million purchases of short-term investments, and $54 million in capital expenditures, partially offset by $34 million in net proceeds from our sale of a majority interest in one of our subsidiaries. Net cash used in investing activities in the three months ended October 3, 2025 primarily consisted of $50 million in capital expenditures, partially offset by $25 million in net proceeds from our sale of a majority interest in one of our subsidiaries and $10 million in net proceeds from activity related to Flash Ventures.

Previous wording

Net cash used in financing activities in the nine months ended April 3, 2026 primarily consisted of Term Loan Facility repayments totaling $1,900 million and $149 million of taxes paid on vested stock awards, partially offset by $24 million in stock issuances under employee stock plans. Net cash provided by financing activities in the nine months ended March 28, 2025 primarily consisted of $1,970 million in proceeds from borrowings from the Term Loan Facility, $550 million in proceeds from borrowings on notes due to WDC, and $101 million in proceeds from repayments on notes due from WDC, partially offset by $1,887 million transferred from WDC, $76 million in net repayments on notes due to WDC and a $32 million debt issuance discount.

Current wording

Net cash used in financing activities in the three months ended October 2, 2026 primarily consisted of $5 billion in repurchases of the Company’s common stock pursuant to the Repurchase Programs (as defined under Share Repurchase Authorization below) and $755 million of taxes paid on vested stock awards. Net cash used in financing activities in the three months ended October 3, 2025 primarily consisted of Term Loan Facility repayments totaling $500 million and $15 million of taxes paid on vested stock awards.

Previous wording

(1) Includes Flash Ventures reimbursement for depreciation and lease payments on owned and committed equipment, funding commitments for loans and equity investments and payments for other committed expenses, including research and development and building depreciation and payments made directly to Kioxia in consideration for the manufacturing services and continued availability of supply. Funding commitments assume no additional operating lease guarantees. Additional operating lease guarantees can reduce funding commitments.

Current wording

(1) Includes Flash Ventures depreciation reimbursement and lease payments on owned and committed equipment, funding commitments for loans and equity investments and payments for other committed expenses, including research and development and building depreciation and payments made directly to Kioxia in consideration for the manufacturing services and continued availability of supply. Funding commitments assume no additional operating lease guarantees. Additional operating lease guarantees can reduce funding commitments.

Previous wording

On March 4, 2026, the Company settled in full the remaining outstanding principal amounts of the Term Loan Facility, plus accrued interest, using cash on hand. In connection with the early settlement of the Term Loan Facility, the Company recognized a loss on debt extinguishment of $46 million resulting from the write-off of the remaining unamortized issuance costs.

Current wording

On March 4, 2026, the Company settled in full the remaining outstanding principal amounts of the Term Loan Facility, plus accrued interest, using cash on hand. In connection with the early settlement of the Term Loan Facility, the Company recognized a loss on debt extinguishment resulting from the write-off of the remaining unamortized issuance costs.

Previous wording

As of April 3, 2026, the Company wasin compliance with the loan agreement financial covenant that prohibits the Company from exceeding a maximum Leverage Ratio. Additional information regarding our indebtedness, including information about availability under our revolving credit facility and the principal repayment terms, interest rates, covenants, collateral and other key terms of our outstanding indebtedness, is included in Part I, Item 1, Note 8, Debt of the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

On September 9, 2026, the Company entered into Amendment No. 1 (“Amendment No. 1”) to its Revolving Credit Facility, originally dated February 21, 2025. Amendment No. 1 modifies certain interest rate provisions and extends the maturity date. Additional information regarding our indebtedness, including information about availability under our revolving credit facility and the principal repayment terms, interest rates, covenants, collateral and other key terms of our outstanding indebtedness, is included in Part I, Item 1, Note 8, Debt of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Previous wording

Flash Ventures sells to, and leases back from, a consortium of financial institutions a portion of its tools and has entered into equipment lease agreements, of which we guarantee half of all of the outstanding obligations under each lease agreement. The leases are subject to customary covenants and cancellation events that relate to Flash Ventures and each of the guarantors. The occurrence of a cancellation event could result in an acceleration of the lease obligations and a call on our guarantees. As of April 3, 2026, we were in compliance with all covenants under these Japanese lease facilities. See Part I, Item 1, Note 10, Related Parties and Related Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding Flash Ventures.

Current wording

From time to time, Flash Ventures sells to, and leases back from, a consortium of financial institutions a portion of its tools and has entered into equipment lease agreements, of which we guarantee half of all of the outstanding obligations under each lease agreement. The lease agreements are subject to customary covenants and cancellation events that relate to Flash Ventures and each of the guarantors. The occurrence of a cancellation event could result in an acceleration of the lease obligations and a call on our guarantees. As of October 2, 2026, we were in compliance with all covenants under these Japanese lease facilities. See Part I, Item 1, Note 10, Related Parties and Related Commitments and Contingencies of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding Flash Ventures.

Previous wording

In the normal course of business, we enter into purchase orders with suppliers for the purchase of components used to manufacture our products. These purchase orders generally cover forecasted component supplies needed for production during the next quarter, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. We also enter into long-term agreements with suppliers that contain fixed future commitments, which are contingent on certain conditions such as performance, quality and technology of the vendor’s components. These arrangements are included under “Purchase obligations and other commitments” in the table above.

Current wording

In the normal course of business, we enter into purchase orders with suppliers for the purchase of components used to manufacture our products. These purchase orders generally cover forecasted component supplies needed for production during the next quarter, are recorded as a liability upon receipt of the components, and generally may be changed or canceled at any time prior to shipment of the components. We also enter into long-term agreements with suppliers that contain fixed future commitments, which are contingent upon certain conditions such as performance, quality and technology of the vendor’s components. These arrangements are included under “Purchase obligations and other commitments” in the table above.

Previous wording

As of April 3, 2026, our liability for unrecognized tax benefits (excluding accrued interest and penalties) was approximately $253 million. Accrued interest and penalties included in the Company’s liability related to unrecognized tax benefits as of April 3, 2026 and June 27, 2025 was $15 million and $11 million, respectively. Of these amounts, approximately $244 million could result in potential cash payments.

Current wording

As of October 2, 2026, our liability for unrecognized tax benefits (excluding accrued interest and penalties) was approximately $350 million. Accrued interest and penalties included in the Company’s liability related to unrecognized tax benefits as of October 2, 2026 and July 3, 2026 was $17 million and $16 million, respectively. Of these amounts, approximately $333 million could result in potential cash payments.

Previous wording

Concurrent with the separation, the Company and WDC entered into a Tax Matters Agreement under which the Company and WDC agreed to indemnify each other for certain tax positions. As a result of this agreement, the Company recorded a tax indemnification liability of $112 million on February 21, 2025, which was recognized as an adjustment to the Net investment from Western Digital Corporation. The remaining tax indemnification liability of $131 million is classified as Other liabilities in the Condensed Consolidated Balance Sheets as of April 3, 2026.

Current wording

Concurrent with the separation, the Company and WDC entered into a Tax Matters Agreement under which the Company and WDC agreed to indemnify each other for certain tax positions. As a result of this agreement, the Company recorded a tax indemnification liability of $112 million on February 21, 2025. The remaining tax indemnification liability of $132 million is classified as Other liabilities in the Condensed Consolidated Balance Sheets as of October 2, 2026.

Previous wording

In connection with entering into long-term agreements during the third quarter of fiscal 2026 with certain customers, we received customer advances that increased our available cash and cash equivalents. We record these customer payments as contract liabilities in advance of performance under the contract. As of April 3, 2026, our contract liabilities were $511 million, which primarily relates to the remaining performance obligations under these long-term agreements. See Part I, Item 1, Note 4, Revenueof the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding our contract liabilities.

Current wording

In connection with entering into long-term agreements with certain customers, we received customer advances that increased our available cash and cash equivalents. We record these customer payments as contract liabilities in advance of performance under the contract. As of October 2, 2026, our contract liabilities were $1.5 billion, which primarily relates to the remaining performance obligations under these long-term agreements. See Part I, Item 1, Note 4, Revenueof the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for information regarding our contract liabilities.

Previous wording

On April 30, 2026, we announced that our Board of Directors has approved a $6 billion (exclusive of fees and commissions) share repurchase program (the “Repurchase Program”). The acquisition of shares under the Repurchase Program may be effected from time to time through open market purchases (including under a plan adopted pursuant to Rule 10b5-1 promulgated under the Securities Exchange Act of 1934) or other methods of acquiring shares, in each case on such terms and at such times as shall be permitted by applicable securities laws and determined by our management. We expect shares repurchased under the Repurchase Program to be funded by operating cash flows. The amount and timing of share repurchases will depend on market conditions and other relevant factors. We may suspend or discontinue the Repurchase Program at any time. The approval of the Repurchase Program does not obligate us to repurchase any common shares.

Current wording

On April 30, 2026, we announced that our Board of Directors had approved a $6.0 billion (exclusive of fees and commissions) share repurchase program. On August 5, 2026, we announced that our Board of Directors had approved an additional $14.0 billion share repurchase program (exclusive of fees and commissions), collectively known as the “Repurchase Programs”. The acquisition of shares under the Repurchase Programs may be effected from time to time through open market purchases (including under a plan adopted pursuant to Rule 10b5-1 promulgated under the Securities Exchange Act of 1934) or other methods of acquiring shares, in each case on such terms and at such times as shall be permitted by applicable securities laws and determined by our management. The amount and timing of share repurchases will depend on market conditions and other relevant factors. We expect shares repurchased under the Repurchase Programs to be funded by operating cash flows. We may suspend or discontinue the Repurchase Programs at any time. The approval of the Repurchase Programs does not obligate us to repurchase any common shares. During the three months ended October 2, 2026, we repurchased approximately 3 million shares of our common stock for an aggregate purchase price of $5.0 billion, and $10.5 billion remained available for future repurchases under the Repurchase Programs as of October 2, 2026.

Previous wording

For a description of recently issued and adopted accounting pronouncements, including the respective dates of adoption and expected effects on our results of operations and financial condition, see Part I, Item 1, Note 2, Recent Accounting Pronouncementsof the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

For a description of recently issued and adopted accounting pronouncements, including the respective dates of adoption and expected effects on our results of operations and financial condition, see Part I, Item 1, Note 2, Recent Accounting Pronouncementsof the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.